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Market Recap
Wall Street experienced a choppy session following a weaker-than-expected CPI print. The Dow Jones Industrial Average gained 32.39 points, or 0.08%, to close at 39,753.75. Meanwhile, the S&P 500 dropped 49.37 points, or -0.88%, to 5,584.54, and the Nasdaq Composite fell sharply by 364.04 points, or -1.95%, to 18,283.41.
The US CPI for June showed a weaker headline measure at -0.1% MoM (+0.1% expected) and +3.0% YoY (+3.2% expected). Core measures were also softer than expected at +0.1% MoM and +3.3% YoY. Additionally, weekly jobless claims data was slightly better than expected, with initial claims at 222k and continuing claims at 1.852 million.
In response to the soft inflation data, the USD weakened as yields fell around 15 basis points across the curve. This resulted in AUD/USD reaching new highs of 0.67985, NZD/USD rising to 0.6134, and EUR/USD and GBP/USD making respective highs of 1.0900 and 1.2949. USD/CAD dropped to lows of 1.35895.
The USD/JPY pair fell sharply from around 161.60 to lows of 157.40 amid speculation of BOJ intervention. However, the pair recovered approximately 100 points later in the NY morning as the USD began to rebound. By the end of the session, USD/CAD rose to new highs of 1.3649, while USD/JPY settled at 158.80.
Day Ahead
Looking ahead, China’s markets are expected to see an uptick in export growth to 8% YoY in June from 7.6% YoY in May. This growth is supported by a lower comparison base and resilient global demand, evidenced by the rising Caixin manufacturing PMI (51.8 in June, the highest since June 2021) and increasing container shipping costs.
Economic Data to Watch
- China: June Trade Balance
- Germany: May Current Account Balance
- Japan: May Capacity Utilization m/m
- Japan: May Industrial Production m/m
- Canada: May Building Permits m/m
- United States: June PPI Final Demand m/m
- Canada: June Existing Home Sales m/m
- United States: July University of Michigan Sentiment
Disclaimer
The information provided in this daily market update is for informational purposes only and should not be considered as financial advice. Trading Forex and CFDs involves significant risk of loss and may not be suitable for all investors. Past performance is not indicative of future results. CA Markets does not guarantee the accuracy or completeness of the information provided, and we recommend consulting with a qualified financial advisor before making any trading decisions. Users are solely responsible for their own trading activities and decisions.
